Imagine if you could run an advertisement on
an internationally viewed television
network, such as CNN, and only pay for the
viewers that actually ended up
visiting your business; this is how Pay Per
Click advertising works.

What is so exciting about Pay Per Click
advertising is that you are not paying to be
listed, you are paying for the actual clicks
you get on your listing!
This is a very important distinction, and
the number one reason that Pay Per Click
advertising is on the rise, whilst banner
and traditional offline marketing programs
are in decline.

Pay Per Click search engines enable you to
guarantee that your advert will appear
amongst the first few positions of search
results generated by a potential
client who is looking for your business
services or product. Not only does this
allow you to guarantee that your website
will show up on the much coveted
first page of search listings, but you can
bid for hundreds of keywords and phrases
that suit your business service or product.

Pay Per Click programs generate "sponsored
results" by auctioning off the most
prominent advertising positions. Bids are
based around key words or phrases (words or
phrases that your potential client may use
to find you) and The position of your advert
is determined by your bid: how much you are
prepared to pay per click when your
potential client uses these key words. Put
simply, the advertiser placing the highest
bid for a key word or key phrase will be
placed in the 1st position of the search
engine's sponsored results when the key word
or phrase is searched; the second highest
bid made will guarantee 2nd position...and
so on.

Because Pay Per Click advertising is so
effective it is not uncommon to see bids of
$2 or more for the top advertising
positions. To bid successfully you may
need to do so several times a day or you
could easily find yourself in fourth
position with a bid of $1.27, while
positions 3, 2 and 1 have been secured with
bids of $1.28, $1.29 and $1.30 respectively.
For 4 cents more, you could be in first
position, if only you could afford the time
and resources to keep
abreast of the ever changing bidding
platform.

Similarly you could also decide that you are
happy in fourth position, but instead of
paying $1.27 a click, you have failed to
notice that you now only need
to bid $0.80 a click in order to stay ahead
of the fifth bidder who has dropped his bid
back down to $0.79.

If you don't stay on top of your Pay Per
Click campaigns, you will inevitably pay
more than you need to pay for the same
results.

Note: Some PPC search programs such as
Google’s AdWords base advertisement
positioning on bid price, but also factor in
the current or past click-through
rate. Search engines such as AOL, Ask Jeeves,
Lycos, About, AltaVista, MSN, and Yahoo all
include paid listings in their search
results.